The Irish Tourist Industry Confederation (ITIC) has called for measures to restore Ireland's competitiveness internationally in its Budget 2004 submission.
The ITIC said the annual Global Competitiveness Report from the World Economic Forum shows Ireland is now the third-least competitive country in the European Union.
In 2000, the same report ranked Ireland as fourth-most competitive country in the world, from among 102 countries, a ranking which slipped to 11th in 2001, 23rd in 2002 and now to 30th in 2003.
The tourist industry has been a particular victim of this worsening competitiveness position, the ITIC says. It advocates a moratorium on indirect tax and price increases that impact the tourism sector,
Although the tourist industry has responded well in the short term to the changed operating environment, the ITIC says it is questionable whether future performance can be maintained in light of lower profits and increased costs.
The ITIC's submission asks the government to restrict public sector price increases and restore tourism-related VAT to 12.5 per cent, as the start of a process to bring this tax down to 10 per cent.
It also calls on the Minister for Finance to avoid further excise or VAT increases and, ideally, reduce the tax on tourism consumables.
Tourism generates €4 billion in revenue from overseas visitors.
It currently provides 140,000 jobs, or one in 12 of all Irish employment. Employment growth in tourism of 70% between 1990 and 2002 exceeded the national performance rate of 50%.